Amazon quits Roomba deal over EU hurdles

Brussels regulator left ‘no path to approval’ of £1.1bn takeover, claims tech giant as irobot cuts third of staff

AMAZON has criticised the EU after it called off a $1.4bn (£1.1bn) takeover of irobot, the company behind Roomba robotic vacuum cleaners. The companies said yesterday it had agreed to call off the deal, announced almost 18 months ago, blaming “undue and disproportionate regulatory hurdles” imposed by Brussels that left “no path to approval”.

Britain’s Competition and Markets Authority (CMA) had given the acquisition the green light, but European regulators were planning to block it.

The US Federal Trade Commission had also been reportedly preparing a lawsuit seeking to prevent it.

The takeover is the latest deal from a big tech company to be called off under pressure from regulators. Announcing that the takeover had collapsed, David Zapolsky, Amazon’s general counsel, said: “This outcome will deny consumers faster innovation and more competitive prices, which we’re confident would have made their lives easier and more enjoyable.”

He added: “Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition – the very things that regulators say they’re trying to protect.” Spun out of the Massachusetts Institute of Technology in the 1990s, irobot launched the first Roomba in 2002. The robots are able to autonomously traverse a customer’s home, recharging at a docking station.

Amazon and irobot originally announced the deal in August 2022 in a major push into the smart home robotics market by the online retailer, which also makes Echo smart speakers and owns the Ring range of home doorbells and cameras.

Following the collapse of the deal, irobot said Colin Angle, its chief executive, would step down and that it would cut 350 jobs – almost a third of its workforce.

Shares fell by 16pc – leaving its market value less than a third of the price Amazon had agreed to pay. Amazon will also pay the company a $94m termination fee as part of the deal being called off.

In November, the EU sent a list of objections to Amazon, warning it could use its takeover to hamper rival brands that sell through its online store, delisting them or making it harder for them to be seen by customers. However, the UK’S CMA had cleared the merger after an investigation last year. The regulator said that irobot’s market share in the UK was “modest” and had plenty of rivals.

Daniel Friedlaender, head of industry lobby group the Computer and Communications Industry Association, warned that the EU’S stance signalled by its crackdown on Amazon risked putting off investors.

He said: “This sends the wrong message to both global investors and EU start-ups: as soon as you reach a certain size, you can forget about future mergers and acquisitions.”